New research from the TaxPayers' Alliance (TPA) today reveals how all areas of the country - not just London - are being hit by punitive property taxes. Despite assumptions that property taxes make up a bigger proportion of regional GDP in London and the South East, Property taxes in the UK and the regions shows how families and businesses across the UK are being hit hard by taxes, acting as a significant barrier for both first-time buyers and many hard-working families who want to relocate or downsize.
What's more, the failure of successive governments to reform planning laws and the resulting soaring house prices means that thousands of home owners are being dragged into higher stamp duty bands, leaving family budgets and local economies weighed down with heavy burdens.
With the UK shown to have the highest property tax burdens in the OECD, the TPA renews its calls for the abolition of stamp duty, as well as urging the new Government to liberalise planning rules, which are essentially laws against house building. Until this happens, these restrictions on new housing supply will carry on forcing up house prices and rents, leaving home ownership as nothing but a dream for younger generations.
The property tax burden rose by £1.8 billion in 2014-15, up 2.8 per cent from £65 billion to £66.8 billion. Most of this was because Stamp Duty on property rose by £1.5 billion. The rest was from business rates while Council Tax receipts fell by £0.1 billion
Property taxes in 2014-15 imposed a substantial burden on all regions of the UK, averaging 3.6 per cent of the national economy
The regions with the highest property tax burden in 2014-15 are the South West, the East of England and Scotland, each with burdens of 4 per cent of the regional economy. The lowest burden is imposed on Northern Ireland, at 3 per cent
The fastest increase was in Scotland, where the burden increased by 4.6 per cent from £5.3 billion to £5.5 billion, a £246 million rise. In Northern Ireland the burden fell by 0.8 per cent from £1.193 billion to £1.184 billion
The UK had the heaviest property taxes in the OECD in 2014 at 4.1 per cent of GDP (on their measure which includes stamp duty on shares and inheritance tax), followed by France (3.9 per cent), Belgium (3.5 per cent) and Canada (3.1 per cent)
The full research note can be found here
Jonathan Isaby, Chief Executive of the TaxPayers' Alliance, said:
"We often hear about the impact of high property taxes on the overheated London housing market, but the truth is that they are a massive burden in every region of the UK. High rates of stamp duty, business rates and Council Tax are a significant barrier to getting on the housing ladder or growing a business - and this is exacerbated by restrictive planning policies which mean firms can't expand and we are building nowhere near enough homes. The new Chancellor should immediately cut stamp duty in half with a view to abolishing it entirely, and politicians must also ease the planning rules so that we can finally start building the number of homes we need. Only then will home ownership become a more realistic proposition for millions of hard-pressed taxpayers."
TPA spokesmen are available for live and pre-recorded broadcast interviews via 07795 084 113 (no texts)